Reeling under disruptions arising out of demonetisation and GST rollout, corporate India is going rather lukewarm in Diwali gifts, slashing the budget under the head by at least 35–40 per cent, Associated Chambers of Commerce and Industry of India (ASSOCHAM) said.
A survey by industry chamber Assocham showed that the reduction in gifts from corporate houses was in sync with low-key festivities due to slowdown concerns and pressure on their balance sheets.
The industry body said the reduction in gifts from corporate houses to their associates, networked partners, employees and other key personalities was more for outside connects than employees who more or less received their annual gesture from their employers.
"However, there has been certainly a downward impact on bonus payments with several corporates reeling under debt and cutting costs in their overall operations. Besides, disruptions arising out of demonetisation and roll out issues of the Goods and Services Tax (GST) have affected the overall sentiment," it said.
Consequent to slowdown in the Diwali gift sale, the FMCG companies that generally bet high on festive sales in the business of chocolates, cookies and sweets are reporting less than normal sales, ASSOCHAM secretary general DS Rawat said.
"Similar is the case with consumer durable firms engaged in washing machines, refrigerators, ovens, electric stoves and other such items. Even the festive sale of high-end smartphones seems to have taken a hit," Rawat said.
"The survey endorses the general low key mood of the industry and trade with the considerable trimming of the festive budget," he said.
The ASSOCHAM had conducted a telephonic survey of about 758 companies across tier I, II and III cities — Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Jaipur, Kolkata, Lucknow, Mumbai in the run-up to Diwali.